$1,600,000 / 6.00% Denny s Modesto, CA

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1 $1,600,000 / 6.00% Denny s Modesto, CA ADAM LUCATELLO Senior Vice President (209) adam.lucatello@colliers.com PLEASE CONTACT EXCLUSIVE BROKERS: RUBEN SANDOVAL Associate (209) ruben.sandoval@colliers.com The information furnished has been obtained from sources we deem reliable and is submitted subject to errors, omissions and changes. Although Colliers International has no reason to doubt its accuracy, we do not guarantee it. All information should be verified by the recipient prior to lease, purchase, exchange, or execution of legal documents.

2 OFFERING MEMORANDUM Adam Lucatello Senior Vice President CA License No W. Orangeburg Avenue Modesto, CA EXCLUSIVELY LISTED BY: Ruben Sandoval Associate CA License No DE N NY S OF FERING MEM O RA N DUM CO L L IE RS INTE R NA TI O NA L 1

3 PROPERTY PHOTOS DE N NY S OF FERING MEM O RA N DUM CO L L IE RS INTE R NA TI O NA L 2

4 INVESTMENT SUMMARY PROPERTY SUMMARY Colliers International is pleased to present a very well established Denny s restaurant, located just off the California State Route 99 (Highway 99) in Modesto, California. Denny s has occupied this site since the building s inception in The lease is corporately guaranteed by Denny s, Inc. and enjoys a desirable, low rent-to-sales ratio. PROPERTY Sisk Road Carpenter Road Orangeburg Avenue The site enjoys excellent freeway visibility and is surrounded by such notable, national anchor tenants as Walmart, Kohl s, WinCo Foods, Petco, FoodMaxx, CVS, Petco and OfficeMax. Additionally, this Denny s neighbors such accommodators as the Marriott s Spring Hill Suites (featuring 11 suites), the Best Western Palm Inn Court (featuring 113 suites), and the Clarion Inn Conference Center Hotel (featuring 186 suites ). Situated on the opposite side of Highway 99 is the Modest Junior College, a 225 acre college with nearly 20,000 students on an annual basis. DE- With the combination of an occupation date of 1967, a Highway 99 visible location, surrounded by national tenants and recognizable hotels, and directly across from Modesto Junior College, this Denny s site provides a potential investor with an excellent opportunity to acquire a favorable addition to their portfolio. INVESTMENT HIGHLIGHTS Corporately Guaranteed Lease Occupied Site Since 1967 Excellent Highway 99 Visibility and Ramp Access Desirable, Low Rent-to-Sales Ratio Surrounded by National Tenants Surrounded by Recognizable Hotels Across from Modesto Junior College Category 3 Mile 5 Mile 10 Mile Population 104, , ,584 Avg. HH Income $55,179 $54,625 $58,543 Traffic Counts Vehicles Per Day Orangeburg Avenue 47,801 Highway ,000 DE N NY S OF FERING MEM O RA N DUM CO L L IE RS INTE R NA TI O NA L 3

5 FINANCIAL OVERVIEW PRICING OVERVIEW RENT ROLL Price: $1,600,000 Cap Rate: 6.00% Years Monthly Rent Annual Rent March 1, February 28, 2017 $8, $96, NOI: $96,000 PROPERTY OVERVIEW Tenant Trade Name: Address: Denny s 2052 W. Orangeburg Avenue Modesto, CA Building Sq. Ft.: 3,968 Lot Square Footage: 34,412 Year Built: 1966 Ownership Type: Fee Simple LEASE OVERVIEW Tenant: Lease Guarantor: Lease Type: Lease Term: Denny s Denny s, Inc. NNN 3 Years Lease Commencement: March 23, 1967 Lease Expiration: February 28, 2017 Rental Increases: Option Periods: Roof & Structure: None None Tenant Responsibility DE N NY S OF FERING MEM O RA N DUM CO L L IE RS INTE R NA TI O NA L 4

6 TENANT OVERVIEW ABOUT DENNY S Denny's is known for always being open, serving breakfast, lunch, dinner, and dessert around the clock. Unlike many other restaurant chains, Denny's does not close on holidays or nights, except where required by law. Many of their restaurants are located in proximity to freeway exits, bars and in service areas. Denny's started franchising in 1963, and most Denny's restaurants are now franchisee-owned. Richard Jezak and Harold Butler founded Denny's (as Danny's Donuts) in Lakewood, California in Denny's expanded to twenty restaurants by 1959, when the chain was renamed Denny's to avoid confusion with another chain, "Doughnut Dan's". The business continued to grow and by 1981, there were over 1,000 restaurants in all 50 U.S. states. In 1977, Denny's introduced the still-popular Grand Slam breakfast. In 1994, Denny's became the largest corporate sponsor of Save the Children, a national charity. All but six Denny's closed for the first time ever on Christmas 1988; many of the restaurants were built without locks, and some had reportedly lost their keys. Denny's main office was located in Irvine, California, until At that time, the office was moved to the Spartanburg, South Carolina, headquarters of the parent company Trans World Corporation (TW Corporation) that acquired Denny's in In 1992, private equity firm, Kohlberg Kravis Roberts acquired a 47% interest in TW Corporation, later known as The Flagstar Companies, and encouraged the company to sell non-core businesses. Eventually, Denny's operations dominated the parent company to such an extent that The Flagstar Companies changed its name again to Denny's Corporation. It now trades on the NASDAQ under the symbol DENN. TENANT INFORMATION Tenant: Parent Company: Number of Locations: Stock Exchange: Ticker Symbol: Credit Rating: Credit Rating Agency: Total Revenue : Headquarters: Website: Denny s Denny s Corporation 1,700+ Nasdaq DENN B+ S&P $ Million Spartanburg, SC DE N NY S OF FERING MEM O RA N DUM CO L L IE RS INTE R NA TI O NA L 5

7 Prescott Road Carpenter Road AERIAL Briggsmore Avenue Sisk Road Brink Avenue Orangeburg Avenue 9th Street Blue Gum Avenue DE N NY S OF FERING MEM O RA N DUM CO L L IE RS INTE R NA TI O NA L 6

8 AREA OVERVIEW CITY OF MODESTO Modesto is located in the Central Valley area of Northern California, 90 miles north of Fresno, 92 miles east of San Francisco, 68 miles south of the state capital of Sacramento, 66 miles west of Yosemite National Park, and 24 miles south of Stockton. Modesto, a 29-time Tree City USA honoree, is surrounded by rich farmland, lending to a ranking for the county as 6th among all California counties in farm production. Led by milk, almonds, chickens, walnuts, and corn silage, the county grossed nearly $3.1 billion in agricultural production in According to the 2011 American Community Survey 5-Year estimate, the median income for a household in the city was $49,852, and the median income for a family was $56,629. Males had a median income of $47,473 versus $37,629 for females. The per capita income for the city was $22,886. About 14.9% of families and 18.5% of the population were below the poverty line, including 27.3% of those under age 18 and 9.5% of those age 65 or over. STANISLAUS COUNTY San Joaquin County is located in the Central Valley of California, just east of the San Francisco Bay Area. As of the 2010 census, the population was 685,306. The county seat is Stockton. The Central Valley is on e of the world s most productive agricultural regions. More than 230 crops are grown there. On less than 1 percent of the total farmland in the United State, the Central Valley produces 8 percent of the nation s agricultural output by value: 17 billion USD in Its agricultural productivity relies on irrigation from both surface water diversions and groundwater pumping from wells. About on-sixth of the irrigated land in the U.S. is in the Central Valley. Virtually all non-tropical crops are grown in the Central Valley, which is the primary source for a number of food products throughout the United States, including tomatoes, almonds, grapes, cotton, apricots, and asparagus. There are 6,000 almond growers that produce more than 600 million pounds a year, about 70 percent of the world s supply. Early farming was concentrated close to the Sacramento-San Joaquin Delta, where the water table was high year round and water transport more readily available, but subsequent irrigation projects have brought many more parts of the valley into productive use. For example, the Central Valley Project was formed in 1935 to redistribute and store water for agricultural and municipal purposes with dams and canals. The even larger California State Water Project was formed in the 1950s and construction continued throughout the following decade. DE N NY S OF FERING MEM O RA N DUM CO L L IE RS INTE R NA TI O NA L 8

9 MAPS REGIONAL MAP AREA MAP SUBJECT PROPERTY DE N NY S OF FERING MEM O RA N DUM CO L L IE RS INTE R NA TI O NA L 9

10 CONFIDENTIALTY & DISCLAIMER This Confidential Offering Memorandum (the Memorandum ) has been prepared and presented to the recipient (the Recipient ) by Colliers International ( Colliers ) as part of Colliers efforts to market for sale the real property located at 2052 W. Orangeburg Avenue, Modesto, CA, ( The Property ). Colliers is the exclusive agent and broker for the owner(s) of the Property (the Owner ). Colliers is providing this Memorandum and the material contained in it to the Recipient solely to assist the Recipient in determining whether the Recipient is interested in potentially purchasing all or part of the Property. Colliers also is providing this Memorandum and the material in it to the Recipient with the understanding that the Recipient will independently investigate those matters that it deems necessary and appropriate to evaluate the Property and that the Recipient will rely only on its own investigation, and not on Colliers, the Owner or this Memorandum, in determining whether to purchase the Property. The Recipient s use of this Memorandum, in determining whether to purchase the Property. The Recipient s use of this Memorandum and the material in it is strictly governed by the terms and conditions of the Registration and Confidentiality Agreement that the Recipient previously executed and delivered to Colliers. PLEASE NOTE THE FOLLOWING: Colliers, the owner and their respective agents, employees, representatives, property managers, officers, directors, shareholders, members, managers, partners, join ventures, corporate parents or controlling entities, subsidiaries, affiliates, assigns and predecessors and successors-in-interest make no representations or warranties abut the accuracy, correctness or completeness of the information contained in this Memorandum. The Recipient is urged not to rely on the information contained in this Memorandum and to make an independent investigation of all matters relating to the Property. This Memorandum includes statements and estimates provided by or to Colliers and/or the Owner regarding the Property. Those statements and estimates may or may not be accurate, correct or complete. Nothing contained in this Memorandum should be construed as a representation or warranty about the accuracy, correctness or completeness of such statements and estimates. Further, nothing contained in this Memorandum should be construed as a representation or warranty about the accuracy, correctness or completeness of such statements and estimates. Further, nothing in this Memorandum should be construed as representation or warranty about any aspect of the Property, including, without limitation, the Property s (1) past, current or future performance, income, uses or occupancy, (2) past, current or prospective tenants, (3) physical condition, (4) compliance, or (5) appropriateness for any particular purpose, investment, use or occupancy. Again, the Recipient is urged not to rely on this Memorandum and the statements and estimates in it and to make an independent investigation regarding the Property and the statements and estimates contained herein. This Memorandum may include statements regarding, references to, or summaries of, the nature, scope or content of contracts and/or other documents relating to the Property. Those statements, references or summaries may or may not be accurate, correct or complete. Additionally, Colliers may not have referenced or included summaries of each and every contract and/or other document that the Recipient might determine is relevant to its evaluation of the Property. Nothing contained in this Memorandum should be construed as a representation or warranty about the accuracy, correctness or completeness of such statements, representations or summaries. On request and as available, and subject to the Owner s consent, Colliers will provide the Recipient with copies of all referenced contracts and other documents. Colliers assumes no obligation to supplement or modify the information contained in this Memorandum to reflect events or conditions occurring on or after the date of its preparation of this Memorandum. This Memorandum does not constitute an offer to sell, or a solicitation of an offer to buy, an interest in the Property. Nothing contained in this Memorandum may be construed to constitute legal or tax advice to a Recipient concerning the Property. More detailed information regarding the anticipated terms, conditions and timing of any offering by the Owner relating to the Property will be provided in due course by separate communication. Colliers and/or the Owner reserve the right to engage at any time in discussions or negotiations with one or more recipients of this Memorandum and/or other prospective purchasers of the Property without notice or other obligation to the Recipient. The Owner reserves the right to change the terms of any offering relating to the Property or to terminate without notice that offering. The Owner also reserves the right to operate the Property in its sole and absolute discretion prior to the completion of any sale of the Property. Colliers reserves the right to return of this Memorandum and the material in it and any other material provided by Colliers to the Recipient at any time. Acceptance of this Memorandum by the Recipient constitutes acceptance of the terms and conditions outlined above. DE N NY S OF FERING MEM O RA N DUM CO L L IE RS INTE R NA TI O NA L 10